Oil tilts lower with signs of weaker demand after U.S. crude build

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Oil futures edged lower Thursday, with the geopolitical premium from Ukraine's continued strikes on Russian refineries offset by concerns about oversupply, amplified by this week's large U.S. crude stock build and Saudi Arabia lowering its December official selling price to Asia.

The latest EIA report showed U.S. crude stockpiles rising by 5.2 million barrels last week, the largest build since July, according to MUFG analysts, raising fears over excess supply and adding further pressure to prices.

Demand weakness also is in focus, as "high frequency indicators suggest that U.S. oil consumption remains subdued," J.P. Morgan said in a note, pointing to weak travel activity and lower container shipments.

"Low refinery run rates showed there is not strong demand for crude in the U.S. right now as a result of a significant refinery turnaround season," which is "fundamentally weighing on prices," Again Capital's John Kilduff said.

Meanwhile, Saudi Arabia significantly reduced the price of its crude for Asian buyers in December as OPEC+ continues to ramp up production, fueling concerns that demand growth in the region may be softening.

Reports of India curtailing purchases of Russian oil, and the rise in refinery margins are supportive for crude prices, but "the latest OPEC+ increases in production have continued to keep most buyers on the sidelines," Dennis Kissler of BOK Financial said in a note.

Front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for December delivery closed -0.3% to $59.43/bbl, and front-month Brent crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) for January ended -0.2% to $63.38/bbl, but front-month Nymex December natural gas (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) finished +2.9% to $4.357/MMBtu, its sixth gain in seven sessions and highest settlement value since March 11.

ETFs: (USO [https://seekingalpha.com/symbol/USO]), (BNO [https://seekingalpha.com/symbol/BNO]), (UCO [https://seekingalpha.com/symbol/UCO]), (SCO [https://seekingalpha.com/symbol/SCO]), (USL [https://seekingalpha.com/symbol/USL]), (DBO [https://seekingalpha.com/symbol/DBO]), (DRIP [https://seekingalpha.com/symbol/DRIP]), (GUSH [https://seekingalpha.com/symbol/GUSH]), (USOI [https://seekingalpha.com/symbol/USOI]), (UNG [https://seekingalpha.com/symbol/UNG]), (BOIL [https://seekingalpha.com/symbol/BOIL]), (KOLD [https://seekingalpha.com/symbol/KOLD]), (UNL [https://seekingalpha.com/symbol/UNL]), (FCG [https://seekingalpha.com/symbol/FCG]), (XLE [https://seekingalpha.com/symbol/XLE])

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